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A brief overview of the Chinese economy since economic reform began in 1978 is given, followed by an assessment of the current economic situation. The challenges facing the administration of President Hu Jintao and Premier Wen Jiabao are identified. The distinctive features of the Hu-Wen strategy for Chinese economic development are described and discussed. The long-term growth prospects are analyzed and projections for the year 2020 are presented. The conclusion is that the prospects for the continuation of Chinese economic growth at the rate of approximately 7 percent per annum for the next decade or two are excellent despite the existence of several risk factors.